In version 1125, in both IE and FireFox - if you change the size of the image, then open the image properties window and click ok, the image dimensions reset to their original size. To reproduce:
- Go here: http://demos.telerik.com/aspnet-ajax/Editor/Examples/SaveInExternalFile/DefaultCS.aspx
- Insert an image
- Change the size using the image "Grab handles"
- Save As External File
- Open the image properties window and click OK
- The image size is reset to its original dimensions